DIRECTOR INDEMNIFICATION AGREEMENT
Exhibit 10.1
This DIRECTOR INDEMNIFICATION AGREEMENT (the “Agreement”) made and entered into this
21st day of August, 2007, by and between Haights Cross Communications, Inc., a Delaware
corporation (the “Company”), and Xxxx X. XxXxxxx, Xx. (the “Indemnitee”).
WHEREAS, it is essential that the Company be able to retain and attract as directors, officers
and employees the most capable persons available;
WHEREAS, increased corporate litigation has subjected directors to litigation risks and
expenses, and the limitations on the availability of director and officer liability insurance has
made it increasingly difficult for the Company to attract and retain such persons;
WHEREAS, the Company’s By-laws permit it to enter into indemnification arrangements and
agreements;
WHEREAS, the Company desires to provide the Indemnitee with specific contractual assurances of
the Indemnitee’s rights to full indemnification against litigation risks and expenses (regardless,
among other things, of any amendment to or revocation of the Company’s By-laws or any change in the
ownership of the Company or the composition of its Board of Directors), which indemnification is
intended to be greater than that which is afforded by the Company’s Certificate of Incorporation
and By-laws and, to the extent insurance is available, the coverage of the Indemnitee under the
Company’s directors and officers liability insurance policies; and
WHEREAS, the Indemnitee is relying upon the rights afforded under this Agreement in accepting
Indemnitee’s position as a director, officer or employee of the Company.
NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:
1. Definitions.
(a) “Corporate Status” describes the status of a person who is serving or has served (i) as a
director, officer or employee of the Company, (ii) in any capacity with respect to any employee
benefit plan of the Company, or (iii) as a director, partner, member, trustee, officer, employee,
or agent of any other Entity at the request of the Company.
(b) “Entity” shall mean any corporation, partnership, limited liability company, joint
venture, trust, foundation, association, organization or other legal entity and any group or
division of the Company or any of its subsidiaries.
(c) “Expenses” shall mean all reasonable fees, costs and expenses incurred in connection with
any Proceeding (as defined below), including, without limitation, attorneys’ fees, disbursements
and retainers (including, without limitation, any such fees, disbursements
and retainers incurred by Indemnitee pursuant to Section 10 of this Agreement), fees and
disbursements of expert witnesses, private investigators and professional advisors (including,
without limitation, accountants and investment bankers), court costs, transcript costs, fees of
experts, travel expenses, duplicating, printing and binding costs, telephone and fax transmission
charges, postage, delivery services, secretarial services, and other disbursements and expenses.
(d) “Indemnifiable Expenses,” “Indemnifiable Liabilities” and “Indemnifiable Amounts” shall
have the meanings ascribed to those terms in Section 3(a) below.
(e) “Liabilities” shall mean judgments, damages, liabilities, losses, penalties, excise taxes,
fines and amounts paid in settlement.
(f) “Proceeding” shall mean any threatened, pending or completed claim, action, suit,
arbitration, alternate dispute resolution process, investigation, administrative hearing, appeal,
or any other proceeding, whether civil, criminal, administrative or investigative, whether formal
or informal, including a proceeding initiated by Indemnitee pursuant to Section 10 of this
Agreement to enforce Indemnitee’s rights hereunder.
2. Services of Indemnitee. In consideration of the Company’s covenants and commitments
hereunder, Indemnitee agrees to serve or continue to serve as a director, officer or employee of
the Company. However, this Agreement shall not impose any obligation on Indemnitee or the Company
to continue Indemnitee’s service to the Company beyond any period otherwise required by law or by
other agreements or commitments of the parties, if any.
3. Agreement to Indemnify. The Company agrees to indemnify Indemnitee as follows:
(a) Subject to the exceptions contained in Section 4(a) below, if Indemnitee was or is a party
or is threatened to be made a party to any Proceeding (other than an action by or in the right of
the Company) by reason of Indemnitee’s Corporate Status, Indemnitee shall be indemnified by the
Company against all Expenses and Liabilities incurred or paid by Indemnitee in connection with such
Proceeding (referred to herein as “Indemnifiable Expenses” and “Indemnifiable Liabilities,”
respectively, and collectively as “Indemnifiable Amounts”).
(b) Subject to the exceptions contained in Section 4(b) below, if Indemnitee was or is a party
or is threatened to be made a party to any Proceeding by or in the right of the Company to procure
a judgment in its favor by reason of Indemnitee’s Corporate Status, Indemnitee shall be indemnified
by the Company against all Indemnifiable Expenses.
4. Exceptions to Indemnification. Indemnitee shall be entitled to indemnification under
Sections 3(a) and 3(b) above in all circumstances other than the following:
(a) If indemnification is requested under Section 3(a) and it has been adjudicated finally by
a court of competent jurisdiction that, in connection with the subject of the Proceeding out of
which the claim for indemnification has arisen, (i) Indemnitee failed to act in good faith and in a
manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company,
(ii) with respect to any criminal action or proceeding, Indemnitee had reasonable cause to believe
that Indemnitee’s conduct was unlawful or (iii) Indemnitee’s conduct
constituted willful misconduct or recklessness, then Indemnitee shall not be entitled to
payment of Indemnifiable Amounts hereunder.
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(b) If indemnification is requested under Section 3(b) and
(i) it has been adjudicated finally by a court of competent jurisdiction that, in
connection with the subject of the Proceeding out of which the claim for indemnification has
arisen, Indemnitee failed to act in good faith and in a manner Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company, Indemnitee shall not
be entitled to payment of Indemnifiable Expenses hereunder; or
(ii) it has been adjudicated finally by a court of competent jurisdiction that
Indemnitee is liable to the Company with respect to any claim, issue or matter involved in
the Proceeding out of which the claim for indemnification has arisen, including, without
limitation, a claim that Indemnitee received an improper personal benefit or improperly took
advantage of a corporate opportunity, Indemnitee shall not be entitled to payment of
Indemnifiable Expenses hereunder with respect to such claim, issue or matter unless the
court in which such Proceeding was brought shall determine upon application that, despite
the adjudication of liability, but in view of all the circumstances of the case, Indemnitee
is fairly and reasonably entitled to indemnity for such Indemnifiable Expenses which such
court shall deem proper.
5. Procedure for Payment of Indemnifiable Amounts. Indemnitee shall submit to the
Company a written request specifying the Indemnifiable Amounts for which Indemnitee seeks payment
under Section 3 of this Agreement and the basis for the claim. The Company shall pay such
Indemnifiable Amounts to Indemnitee within twenty (20) calendar days of receipt of the request. At
the request of the Company, Indemnitee shall furnish such documentation and information as are
reasonably available to Indemnitee and necessary to establish that Indemnitee is entitled to
indemnification hereunder.
6. Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provision of this Agreement, and without limiting any such provision, to
the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding, Indemnitee shall be indemnified against
all Expenses reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.
If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the
Company shall indemnify Indemnitee against those Expenses reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection with each successfully resolved claim, issue or matter. For
purposes of this Agreement, the termination of any claim, issue or matter in such a Proceeding by
dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim,
issue or matter.
7. Effect of Certain Resolutions. Neither the settlement nor termination of any
Proceeding nor the failure of the Company to award indemnification or to determine that
indemnification is payable shall create an adverse presumption that Indemnitee is not entitled to
indemnification hereunder. In addition, the termination of any proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not create a
presumption that Indemnitee did not act in good faith and in a manner which Indemnitee
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reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any
criminal action or proceeding, had reasonable cause to believe that Indemnitee’s action was
unlawful.
8. Agreement to Advance Interim Expenses; Conditions. The Company shall pay to
Indemnitee all Indemnifiable Expenses incurred by Indemnitee in connection with any Proceeding,
including a Proceeding by or in the right of the Company, in advance of the final disposition of
such Proceeding, if Indemnitee furnishes the Company with a written undertaking to repay the amount
of such Indemnifiable Expenses advanced to Indemnitee if it is finally determined by a court of
competent jurisdiction that Indemnitee is not entitled under this Agreement to indemnification with
respect to such Indemnifiable Expenses. Such undertaking shall be an unlimited general obligation
of Indemnitee, shall be accepted by the Company without regard to the financial ability of
Indemnitee to make repayment, and in no event shall be required to be secured.
9. Procedure for Payment of Interim Expenses. Indemnitee shall submit to the Company a
written request specifying the Indemnifiable Expenses for which Indemnitee seeks an advancement
under Section 8 of this Agreement, together with documentation evidencing that Indemnitee has
incurred such Indemnifiable Expenses. Payment of Indemnifiable Expenses under Section 8 shall be
made no later than twenty (20) calendar days after the Company’s receipt of such request and the
undertaking required by Section 8.
10. Remedies of Indemnitee.
(a) Right to Petition Court. In the event that Indemnitee makes a request for payment of
Indemnifiable Amounts under Sections 3 and 5 above or a request for an advancement of Indemnifiable
Expenses under Sections 8 and 9 above and the Company fails to make such payment or advancement in
a timely manner pursuant to the terms of this Agreement, Indemnitee may petition the appropriate
judicial authority to enforce the Company’s obligations under this Agreement.
(b) Burden of Proof. In any judicial proceeding brought under Section 10(a) above, the
Company shall have the burden of proving that Indemnitee is not entitled to payment of
Indemnifiable Amounts hereunder.
(c) Expenses. The Company agrees to reimburse Indemnitee in full for any Expenses incurred by
Indemnitee in connection with investigating, preparing for, litigating, defending or settling any
action brought by Indemnitee under Section 10(a) above, or in connection with any claim or
counterclaim brought by the Company in connection therewith.
(d) Validity of Agreement. The Company shall be precluded from asserting in any Proceeding,
including, without limitation, an action under Section 10(a) above, that the provisions of this
Agreement are not valid, binding and enforceable or that there is insufficient
consideration for this Agreement and shall stipulate in court that the Company is bound by all
the provisions of this Agreement.
(e) Failure to Act Not a Defense. The failure of the Company (including its Board of
Directors or any committee thereof, independent legal counsel, or stockholders) to
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make a determination concerning the permissibility of the payment of Indemnifiable Amounts or the
advancement of Indemnifiable Expenses under this Agreement shall not be a defense in any action
brought under Section 10(a) above, and shall not create a presumption that such payment or
advancement is not permissible.
11. Representations and Warranties of the Company. The Company hereby represents and
warrants to Indemnitee as follows:
(a) Authority. The Company has all necessary corporate power and authority to enter into, and
be bound by the terms of, this Agreement, and the execution, delivery and performance of the
undertakings contemplated by this Agreement have been duly authorized by the Company.
(b) Enforceability. This Agreement, when executed and delivered by the Company in accordance
with the provisions hereof, shall be a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting
the enforcement of creditors’ rights generally.
12. Insurance. The Company will use commercially reasonable efforts to obtain and
maintain a policy or policies of insurance in an amount not less than $1,000,000 with a deductible
of not greater than $50,000, with reputable insurance companies providing the Indemnitee with
coverage for losses from wrongful acts, and to ensure the Company’s performance of its
indemnification obligations under this Agreement. In all policies of director and officer liability
insurance, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee at
least the same rights and benefits as are accorded to the most favorably insured of the Company’s
officers and directors. Notwithstanding the foregoing, if the Company, after employing commercially
reasonable efforts as provided in this Section, determines in good faith that such insurance is not
reasonably available, if the premium costs for such insurance are disproportionate to the amount of
coverage provided, or if the coverage provided by such insurance is limited by exclusions so as to
provide an insufficient benefit, the Company shall use its commercially reasonable efforts to
obtain and maintain a policy or policies of insurance with coverage having features as similar as
practicable to those described above.
13. Fees and Expenses. During the term of the Indemnitee’s service as a director, the
Company shall promptly reimburse the Indemnitee for all expenses incurred by him in connection with
his service as a director or member of any board committee or otherwise in connection with the
Company’s business and shall pay or provide the Indemnitee with fees and other compensation,
including stock options or awards, in amounts and value which are at least equal to those provided
to any of the Company’s other directors from time to time.
14. Contract Rights Not Exclusive. The rights to payment of Indemnifiable Amounts and
advancement of Indemnifiable Expenses provided by this Agreement shall be in addition to, but not
exclusive of, any other rights which Indemnitee may have at any time under applicable law, the
Company’s By-laws or Certificate of Incorporation, or any other agreement, vote of stockholders or
directors, or otherwise, both as to action in Indemnitee’s official capacity and as to action in
any other capacity as a result of Indemnitee’s serving as a director of the Company.
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15. Successors. This Agreement shall be (a) binding upon all successors and assigns of
the Company (including any transferee of all or a substantial portion of the business, stock and/or
assets of the Company and any direct or indirect successor by merger or consolidation or otherwise
by operation of law) and (b) binding on and shall inure to the benefit of the heirs, personal
representatives, executors and administrators of Indemnitee. This Agreement shall continue for the
benefit of Indemnitee and such heirs, personal representatives, executors and administrators after
Indemnitee has ceased to have Corporate Status.
16. Subrogation. In the event of any payment of Indemnifiable Amounts under this
Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of
contribution or recovery of Indemnitee against other persons, and Indemnitee shall take, at the
request of the Company, all reasonable action necessary to secure such rights, including the
execution of such documents as are necessary to enable the Company to bring suit to enforce such
rights.
17. Change in Law. To the extent that a change in applicable law (whether by statute or
judicial decision) shall permit broader indemnification than is provided under the terms of the
Certificate of Incorporation or By-laws of the Company and this Agreement, Indemnitee shall be
entitled to such broader indemnification and this Agreement shall be deemed to be amended to such
extent.
18. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement, or any clause thereof, shall be determined by a court of competent
jurisdiction to be illegal, invalid or unenforceable, in whole or in part, such provision or clause
shall be limited or modified in its application to the minimum extent necessary to make such
provision or clause valid, legal and enforceable, and the remaining provisions and clauses of this
Agreement shall remain fully enforceable and binding on the parties.
19. Indemnitee as Plaintiff. Except as provided in Section 10(c) of this Agreement and in
the next sentence, Indemnitee shall not be entitled to payment of Indemnifiable Amounts or
advancement of Indemnifiable Expenses with respect to any Proceeding brought by Indemnitee against
the Company, any Entity which it controls, any director or officer thereof, or any third party,
unless the Company has consented to the initiation of such Proceeding. This Section shall not apply
to counterclaims or affirmative defenses asserted by Indemnitee in an action brought against
Indemnitee.
20. Modifications and Waiver. Except as provided in Section 17 above with respect to
changes in applicable law which broaden the right of Indemnitee to be indemnified by the Company,
no supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by each of the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement
(whether or not similar), nor shall such waiver constitute a continuing waiver.
21. General Notices. All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given when delivered by hand, (b) when
transmitted by facsimile and receipt is acknowledged, or (c) if mailed by certified
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or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:
| (a) If to Indemnitee, to: | Xxxx X. XxXxxxx, Xx. | |||
| 39 Very Xxxxx Xxxx | ||||
| Xxxxxxxx, XX 00000 | ||||
| (b) If to the Company, to: | Haights Cross Communications, Inc. | |||
| 00 Xxx Xxxx Xxxxxx | ||||
| Xxxxx 000 | ||||
| Xxxxx Xxxxxx, XX 00000 | ||||
| Facsimile: (000) 000-0000 | ||||
| Attn: President |
or to such other address as may have been furnished in the same manner by any party to the others.
22. Governing Law. This Agreement shall be governed by and construed and enforced under
the laws of the State of New York without giving effect to the provisions thereof relating to
conflicts of law.
23. Consent to Jurisdiction. The Company hereby irrevocably and unconditionally consents
to the jurisdiction of the courts located in the State of New York to construe and enforce the
covenants contained in this Agreement. The Company hereby irrevocably and unconditionally waives
any objection to the laying of venue of any Proceeding arising out of or relating to this Agreement
in the courts located in the State of New York, and hereby irrevocably and unconditionally waives
and agrees not to plead or claim that any such Proceeding brought in any such court has been
brought in an inconvenient forum.
24. Agreement Governs. This Agreement is to be deemed consistent wherever possible with
relevant provisions of the Company’s Amended and Restated By-laws and Certificate of Incorporation;
however, in the event of a conflict between this Agreement and such provisions, the provisions of
this Agreement shall control.
[End of Text]
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IN WITNESS WHEREOF, the parties hereto have executed this Director Indemnification Agreement
as of the day and year first above written.
| THE COMPANY: HAIGHTS CROSS COMMUNICATIONS, INC. |
||||
| By: | /s/ Xxxx X. Xxxxxx | |||
| Name: | Xxxx X. Xxxxxx | |||
| Title: | Executive Vice President and Chief Financial Officer | |||
| INDEMNITEE: |
||||
| /s/ Xxxx X. XxXxxxx, Xx. | ||||
| Name: | Xxxx X. XxXxxxx, Xx. | |||
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